BEIJING, April 29 (Reuters) - Demand for Huawei's Ascend 950 AI chips has surged following the release of DeepSeek's V4 artificial intelligence model that runs on the Shenzhen-based tech firm's chips, with major Chinese internet firms rushing to secure orders, three people familiar with the matter said.
China's biggest internet firms including ByteDance, Tencent and Alibaba are reaching out to Huawei about new chip orders, said the sources, who are familiar with the procurement discussions.
Companies
specializing in cloud computing and graphics processing unit (GPU) rental services are also scrambling to place orders, two of the sources added, without providing the names of the firms.
While the 950PR significantly outperforms Nvidia's H20 chip - the most powerful chip Nvidia was permitted to sell in China until Beijing blocked its import last year - it still trails the American firm's H200, a more advanced processor that has been caught up in regulatory limbo.
Despite U.S. and Chinese approvals for exports, the H200 has yet to be shipped to China as Beijing and Washington remain at odds over the conditions governing its sale, providing an opportunity for Huawei to sell its semiconductors.
The 950PR represents a breakthrough for Huawei after years of struggling to win large orders from China's tech sector. Customer testing of the chip went well earlier this year, with firms including ByteDance and Alibaba planning orders after samples were distributed in January, Reuters reported in March.
Huawei, ByteDance, Alibaba and Tencent did not respond to Reuters requests for comments.
DEEPSEEK FRENZY
The scramble for Huawei's chips underscores how DeepSeek's V4 release last week has turbocharged demand for domestic Chinese AI hardware as U.S. export controls continue to restrict access to Nvidia's most advanced processors. It is also an endorsement of the performance of Huawei's chips so far.
DeepSeek's decision to optimize its V4 specifically for Huawei's chips marks a strategic shift away from American semiconductor dependence and more towards China's homegrown AI gear, which is a priority for Beijing as it seeks tech supremacy.
Last week, Huawei said its Ascend supernode infrastructure, built on the Ascend 950 series chips, would fully support DeepSeek V4 models and that the entire Ascend SuperNode product line had been adapted for V4 inference, referring to the process of using a trained AI model to answer queries and execute tasks.
Among Chinese chipmakers, Huawei's Ascend 950 series - specifically the 950PR variant - is the only domestic chip to support a technique that processes AI calculations in a more compressed numerical format, allowing it to handle more computations per second at a lower cost.
Highlighting the rush for access, Alibaba Cloud's Bailian platform made DeepSeek V4 available on the day that it was released, offering both the V4-Pro and V4-Flash variants with pricing matching DeepSeek's official rates.
Tencent Cloud launched V4 preview services on its TokenHub platform on the same day, deploying the model on both domestic nodes and its Singapore international gateway to serve global users.
The rapid deployment by major cloud platforms means millions of users and developers can now access V4, sharply increasing the volume of AI queries that need to be processed - and with it, demand for the underlying chips.
SUPPLY CONSTRAINTS PERSIST
DeepSeek, which is offering developers a 75% discount on its new model until May 5, said V4-Pro pricing could decline significantly in the second half of 2026 once Huawei's Ascend 950 supernodes "ship at scale."
However, the company acknowledged that constraints would persist until production ramps up, reflecting the tight supply of high-end homemade AI chips.
DeepSeek's V4 includes two versions: V4-Pro with 1.6 trillion total parameters and V4-Flash with 284 billion parameters, both supporting a one-million-token context window. The models are available as open-source releases under the permissive MIT open-source licence, which allows companies to freely use, modify and commercialise the models.
However, output of the 950 is expected to fall short of demand due to U.S. export restrictions on advanced chipmaking tools that prevent China from acquiring cutting-edge manufacturing equipment.
Huawei planned to ship around 750,000 units of the 950PR this year, with mass production beginning in April and full-scale shipments starting in the second half of 2026, according to people familiar with the plans.
(Reporting by Beijing and Hong Kong newsrooms; Editing by Anne Marie Roantree and Thomas Derpinghaus)
